December

14, 1992

HOUSE OF ASSEMBLY PROCEEDINGS

Vol. XLI No. 84

The House met at 2:00 p.m.

MR. SPEAKER (Lush): Order, please!

Statements by Ministers

MR. SPEAKER: The hon. the Minister of Social Services.

MR. GULLAGE: Mr. Speaker, the philosophy mandate and

services of the child welfare program of the Department of Social Services

focuses on the prevention of neglect, abuse, and exploitation of children. In an

effort to achieve this objective all child welfare services and programs centre

upon the enhancement of family living and the strengthening of parental

abilities to provide suitable child care. The government realizes that service

needs have escalated in all program areas carried out by the Department of

Social Services and we wish to advise that areas other than child welfare, which

I am addressing today, have not been forgotten. We have continuously examined

staffing and other requirements over the past years and will continue to do so

in the future. I am pleased to stand in the House of Assembly today to announce

approval for the hiring of twenty-five additional social workers for the child

welfare program -

SOME HON. MEMBERS: Hear, hear!

MR. GULLAGE: - of the Department of Social Services. This

move to hire additional social workers comes in response to a critical situation

in the department. Child welfare statistics illustrate a major increase in work

load, especially over the past two years. Mr. Speaker, the government of

Newfoundland and Labrador realizes and supports the philosophy of the child

welfare program and stands behind the workers in the Department of Social

Services in their role in carrying out the services of the child welfare

program. In fact, Mr. Speaker, all employees of the Department of Social

Services are to be commended for their dedication to carry out these services in

light of limited resources and dramatic increases in case load.

Economic and social factors play a critical role in the

shifting and emerging trends within every program area of the department. As the

officials of the department track these trends we will attempt to respond to the

changing needs and as a result staffing levels will change. Already we have

taken action through the hiring of fifty social workers in child welfare in 1990

and recently have realigned and moved a number of positions to the front line

and into district offices to help improve the current condition.

It is important at this time also, Mr. Speaker, to recognize

governments decision to exempt front line staff of the Department of Social

Services from the current hiring freeze. This exemplifies the compassion and

understanding of government for the significance of social services work carried

out for the people of this Province. We have listened to all parties, have

responded andwill continue to do so in the future. In conclusion, let me assure

hon. members and the citizens of Newfoundland and Labrador, that the recruitment

process for twenty-five social workers for the child welfare program will begin

immediately. A precise process of assigning the workers in areas most needed

throughout the Province will be carried out. We are taking a serious approach to

the dramatic demand for child welfare services and commit ourselves to ongoing

monitoring and evaluation of all services and programs of the department.

Thank you.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Member for Burin - Placentia

West.

MR. TOBIN: Mr. Speaker, let me say to the minister that I

think it is nice to see a start made on the announcement that was made in 1990,

because a lot of these social work positions that were announced then have not

been filled according to what I have been told. I also say to the minister that,

while it is a start it does not go near far enough. I challenge the minister to

table in this House the case analysis that was just done by his department, and

the twenty-five people whom he is announcing today, are not even enough to cover

the numbers suggested for St. John's alone, not alone outside St. John's. You

have five regions in this Province, Mr. Speaker, and what the minister is

announcing today is an additional five social workers per region, that is

basically what it amounts to. You have fifty offices, all of them are overworked

and many of them, over half of them, will not receive any of these additional

workers.

I would also like the minister to tell us how long it is

going to take for these twenty-five additional social workers to be put in

place, and how much longer will the children who need those services in this

Province be continued to be neglected by this government. Another statistic that

is worthy of note when you talk about social workers per se for the department,

based on the recommendations of the report that was done in the caseload

analysis for the minister, is that there is an additional 30,000 cases on social

assistance up over last year, there has been an increase of 30,000 cases, and a

lot more than twenty-five social workers are needed to cope with an additional

30,000 cases. The minister is looking, it is 29,000 and I think he will probably

be tabling it later today in the House.

But what we have, is a situation, where something has

started, it was announced in 1990, has been re-announced today, and it is time

to have something done with what is going on. These twenty-five social workers,

it is a start, it is not near enough and I encourage the minister to look -

AN HON. MEMBER: (Inaudible).

MR. TOBIN: You did not know too much, to end up in the

back benches.

MR. SPEAKER: Order, please!

MR. TOBIN: I encourage the minister, Mr. Speaker -

MR. SPEAKER: Order, please!

The hon. member's time is up.

MR. TOBIN: - to act on the caseload analysis that has

been prescribed.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Member for St. John's East.

MR. HARRIS: Mr. Speaker, I would like the unanimous

consent of the House to speak to the Ministerial Statement.

SOME HON. MEMBERS: By leave.

SOME HON. MEMBERS: No leave.

MR. SPEAKER: The hon. member does not have leave, I

gather.

The hon. member does not have leave.

MR. HARRIS: Thank you, Mr. Speaker.

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: Mr. Speaker, the government is quite

concerned at the prospect of a dispute developing between the Auditor General,

as a servant of this House, and Memorial University of Newfoundland that has

been developing in recent days. We are acting to address it and hopefully to

resolve it before it becomes more serious.

The Auditor General asserts that she has the right to audit

Memorial University. The University responds that the House of Assembly has

empowered the Lieutenant-Governor in Council to appoint auditors for it, and

that the mandate to audit the University given to a private firm of chartered

accountants in March 1989 is still valid. The Auditor General has made a special

report to the House of Assembly about the matter, as she is entitled to do. I

understand proceedings in the Supreme Court have been threatened if they have

not actually been initiated. Members will recall, too, that the Public Accounts

Committee has also made a special report to the House in which we were told of a

dispute between that Committee and the University about a related matter.

These matters raise very important issues of principle. On

one hand, there is the unquestioned right and responsibility of the House of

Assembly - and the Auditor General, as our servant - to review and control

public expenditures. As against that must be set the equally strong principle

that the University must not only be independent, but must be seen to be so.

The Minister of Justice has canvassed these issues, at my

request, and provided me with a memorandum that sets out the legal position

briefly and raises the public policy issues that must be addressed.

I am confident that I speak for every Member of the House

when I suggest that it behooves all concerned to make every effort to resolve

this dispute without resort to litigation. I will today be asking the Auditor

General and the President of the University to meet with me and several of my

colleagues toward this end. I am also asking each of them to take no further

action of any sort with respect to these matters until we have been able to

meet. We shall do so as soon as possible, in all likelihood within the next

several days, and I will report to the House further after that time.

MR. SPEAKER: The hon. the Leader of the Opposition.

MR. SIMMS: Mr. Speaker, there is not much one can add to

this. It is pretty much a non-announcement. I guess the Premier wanted to inform

the House that he is going to meet, and that is fine. We wish him luck.

All I can refer him to, as he referred to in his statement

himself, is the statement by the Public Accounts Committee, which represents

members of this House, that the Committee does not consider that Memorial has

any special rights or privileges compared to any other government agency or

Crown corporation pertaining to the accountability of public monies. I think

that probably says it all from our perspective on this side. The only thing I

can say is I hope the Premier has some success with the meetings and maybe can

resolve the matter. There is not much else that can be said at this stage.

MR. SPEAKER: The hon. the Member for St. John's East.

MR. HARRIS: I am seeking leave, Mr. Speaker.

MR. SPEAKER: Does the hon. member have leave?

SOME HON. MEMBERS: No. leave.

MR. SPEAKER: No leave.

Oral Questions

MR. SPEAKER: The hon. the Leader of the Opposition.

MR. SIMMS: Mr. Speaker, I have a question for the

Premier. Hardly a day goes by now, that you don't hear some municipality crying

out for some kind of help from this government. You see it in letters, copies of

letters, you hear it in public comments, you hear it in news stories, and they

all contain criticism of the government's handling of a number of issues which,

in their view, have been poorly handled. I refer to issues like down-loading to

municipalities, changes to the operating grant structure, amalgamation and,

indeed, just today I heard a representative from the federation expressing some

real concerns about whether or not people would even be prepared and willing to

seek office in the municipal elections coming up in November. Mr. Speaker, one

of the biggest criticisms from the municipalities is towards the way government

is really handling a lot of these issues and how they continue to change in

midstream. I want to ask the Premier, Is he aware of this festering criticism

and concern among municipalities and more importantly, how does he intend to

deal with the mess that he and his government have created for municipalities

over the last couple of years?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: Mr. Speaker, I am not aware of any

festering criticism or concern among municipalities except that which the hon.

member's statements appear to invoke or create, or fabricate. Certain

municipalities, particularly those that have in the past imposed a very high

municipal tax rate on utilities, and by that means effectively tax citizens in

other municipalities in the Province are quite disturbed at the fact that

government in its effort to achieve fair and balanced government is putting in

place a regulatory process that will limit their ability to do that. Quite apart

from that I do not think there is any festering concern amongst municipalities.

MR. SPEAKER: The hon. the Leader of the Opposition.

MR. SIMMS: Well, that answers the question pretty

clearly, Mr. Speaker. There is not much point in going to him with any other

supplementaries. I will go to the minister with a supplementary. Included in the

funding that is provided to the municipalities is an amount per kilometre of

road in each municipality known as the road component. In 1989 when this

government took office,the road component was approximately $2000 per kilometre

and last year the municipalities were told at the beginning of the year it would

be approximately $860 per kilometre and in mid-year that was dropped to about

$480 per kilometre. Now, next year, they have been told, it is going to be

somewhere in the area of $81.47 per kilometre. I want to ask the minister:

Doesn't he consider that amount to be an insult to municipalities? Isn't he

embarrassed, as the minister, to have to relay that information to

municipalities? How can they be assured that even this piddly little amount of

$81.47 won't again be changed in mid-stream as this government has done many

times in the past?

MR. SPEAKER: The hon. the Minister of Municipal and

Provincial Affairs.

MR. HOGAN: Mr. Speaker, all members of the House of

Assembly are aware that the municipal operating grant is being reduced in a

phase-in period over three years, to $41 million, and it is going to be capped

there because of the necessary restraint and the fiscal position that we find

ourselves in, as a part of the overall program. As a result of implementing the

other components in the municipal operating grant it means a downgrading, I

guess, or an erosion of the roads component grant, that's the other grants, the

incentive grant and the household grant increases.

MR. SPEAKER: The hon. the Leader of the Opposition.

MR. SIMMS: Mr. Speaker, if my recollection is correct,

this was announced probably the same year the then Minister of Finance announced

a $10 million surplus. It had nothing to do with restraints. That was when they

announced the policy. Anyway, we will get into that a little later on.

I want to ask him this: By law, municipalities must have

balanced budgets submitted to the minister by December 31, according to the

legislation. Now, in view of the confusion and the criticism and the festering

problems that are existing out there among municipalities, and in view of the

fact that these are volunteer councillors, with only two weeks left, I guess,

before Christmas, just having received notification on Friday past of their

operating grants - and even in that notification it says: subject to change

-there could still be further changes - I want to ask the minister: Is he at

least going to give the municipalities an extension to that December 31 deadline

to allow these volunteers an opportunity to properly respond to the request with

respect to budget?

MR. SPEAKER: The hon. the Minister of Municipal and

Provincial Affairs.

MR. HOGAN: The Department of Municipal Affairs, Mr.

Speaker, has always been flexible upon the acceptance of budgets, going back as

long as I've been associated - back in 1969. Some of my colleagues sitting

across the House have accepted budgets right up into February, and it is only on

written notice or the courtesy of exchange of communication. It has always been

done and I see no reason to change it.

MR. SPEAKER: The hon. the member for Fogo.

MR. WINSOR: Thank you, Mr. Speaker.

I have a question for the same minister. Will the minister

advise if he still intends to proceed with legislation on the uniform utility

tax, and can he further tell us what kind of discussions took place with the

municipalities in the Province prior to its implementation? I know he talked to

the hydro and utility companies. What kinds of discussions did he have with the

municipalities, the stakeholders in this?

MR. SPEAKER: The hon. the Minister of Municipal and

Provincial Affairs.

MR. HOGAN: Mr. Speaker, it would take all afternoon to

answer the question in any great details but discussions with the Federation

of Municipalities go back twenty-odd years.

On the recent piece of legislation, the Federation was

approached in June, the same time that the utility companies were approached,

within twenty-four hours or less of each other, and asked to partake in

confidential discussions on the legislation and on a draft outline of what might

or might not take place. The Federation rejected that position. They didn't want

to have any confidential discussions unless they could share with all of their

members. We - when I say 'we,', I mean, the department - at that time continued

our discussions with the utility companies, and in November went back to the

utility companies and the Federation with the results of all of our discussions

and what we intended to do, and have acted accordingly since.

MR SPEAKER: The hon. the member for Fogo, on a

supplementary.

MR. WINSOR: Is the minister, then, confirming that no

discussion took place with municipalities during these months, from June to

November, and that this was a complete surprise to them?

Furthermore, the minister in his statement said that the

utility tax will be assessed at 2.5 per cent of gross revenues of a company in a

particular year, the year preceding. Can the minister indicate, that if a

municipality decides that they want to charge 2.75 or 3 per cent, will they be

allowed to charge more than the 2.5 per cent or is that a maximum?

MR. SPEAKER: The hon. the Minister of Municipal and

Provincial Affairs.

MR. HOGAN: I can't say, Mr. Speaker, with any degree of

honesty that the hon. member is correct in saying there was no

consultation. There was the offer of consultation in June. I

have hitherto downplayed that because I didn't want to get into a war of words

with the hon. member or the Federation on that particular matter. But there was

lots of opportunity and every offer was made to the Federation of Municipalities

to discuss this matter on a number of occasions in June. Over the summer, we had

lots of communication on other matters and all they had to do was bring it up

again, and the subject did come up from time to time. In November, when a direct

course of action had been decided upon, they were fully advised and were quite

aware of when it would take place.

MR. SPEAKER: The hon. the Member for Fogo.

MR. WINSOR: The minister didn't answer my question, Mr.

Speaker. I will ask the minister again: Can a municipality charge more than the

2.5 per cent, as the minister indicated in his statements? Assuming they want to

charge 3 per cent, are they going to be allowed to charge it?

MR. SPEAKER: The hon. the Minister of Municipal and

Provincial Affairs.

MR. HOGAN: I apologize to the hon. member, Mr. Speaker,

for missing the second part of his question. Yes, a municipality can, for want

of a better word, introduce a consumption tax that they can put on at their

level in their community for their taxpayers to pay.

MR. SPEAKER: A supplementary, the hon. the Member for

Fogo.

MR. WINSOR: A final supplementary, Mr. Speaker. So the

minister is indicating that they can charge more than 2.5 per cent. Will that

then be charged as a surcharge to the users in the given community who charge

more than 2.5 per cent? So really, in essence, what you are saying is it would

be taxation in another way: instead of taxing the municipality hydro company

now, you are going to tax the user. Is that what the minister is saying will

happen?

MR. SPEAKER: The hon. the Minister of Municipal and

Provincial Affairs.

MR. HOGAN: Yes, Mr. Speaker, the municipality will have

that ability to add - if he wants to call it a surtax, fine. They can add to the

2.5 per cent, but they will have to do it at the local level. As opposed to now,

if a community is charging 30 per cent on gross revenue in my town of Dunville,

then every other community in Newfoundland is contributing to that 30 per cent.

In this particular case and with this ability, only the taxpayers in the

community where the tax is placed will pay the tax.

MR. SPEAKER: The hon. the Member for Humber Valley.

MR. WOODFORD: Thank you, Mr. Speaker.

Back in late November, I spoke to the Great Humber Joint

Council at a meeting in Benoit's Cove. The Western Star reported at that time on

some of the comments that I had made, one comment being that the new MOG system

would deter volunteers from running for councils in the Province, rather ironic

when I come out here this morning and hear a statement by the Federation of

Municipalities say much the same thing.

Anyway, in a scathing attack in a letter to the editor on

December 11, the Minister responsible for Municipal Affairs said that: the hon.

member didn't understand the grant and didn't know what he was talking about. In

that particular statement, as well, the minister said that the new municipal

grant system of the Provincial Government is the best formula and provides the

best municipal operating grants in all of Canada. Does the minister stand by

that assertion today?

MR. SPEAKER: The hon. the Minister of Municipal and

Provincial Affairs.

MR. HOGAN: Do you want me to sing that song, "I stand by

my man?" I stand by my statement.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Member for Humber Valley.

MR. WOODFORD: A supplementary, Mr. Speaker. The minister,

also, in his letter to the editor made some alarming statements - but he made

another - and I want to ask him if this is actually true - he made a statement

here earlier on a question by one of my colleagues, and I will ask him now again

to give him a chance to try to redeem himself. He said, 'To alleviate any

hardships these reductions would impose on certain municipalities, we took the

decision to phase in the grants over a three-year period.' Does the minister

stand by that statement?

MR. SPEAKER: The hon. the Minister of Municipal and

Provincial Affairs.

MR. HOGAN: Yes, Mr. Speaker.

MR. SPEAKER: The hon. the Member for Humber Valley.

MR. WOODFORD: A supplementary, Mr. Speaker. Would the

minister please explain to the House why there was absolutely no comment made to

a phase-in period pertaining to the MOG system in 1989, 1990, 1991, and the only

reference made to a phase-in period was the reference made on the repayment on

the new formula of capital debt? It had nothing to do with the MOG.

MR. SPEAKER: The hon. the Minister of Municipal and

Provincial Affairs.

MR. HOGAN: Mr. Speaker, I must be as stunned as the hon.

member because I can't understand what he is saying.

AN HON. MEMBER: You are as stunned as you look.

MR. HOGAN: I must be as stunned as I look, yes - because

he is so confused over the issue.

Very simply, in 1989, or whenever it was, there was a budget

of $49 million or $48 million, and there was a restraint program of $7 million

reduction - give or take a few dollars - introduced into that program because of

restraints.

Government, upon representation from whoever -

municipalities, the Federation, and probably from members of the House - decided

to phase that reduction in over a three-year period, hence, the MOG grant system

was reduced over that period in a phased-in, three-year period.

MR. SPEAKER: The hon. the Member for Humber Valley.

MR. WOODFORD: A supplementary, Mr. Speaker.

AN HON. MEMBER: That is as clear as mud.

MR. WOODFORD: Well, I am glad the minister is making it

obviously very clear for other members of the House to understand.

Could the minister tell me, then, if he stands by this

statement, and his reference that the old grants system was not working, and in

order to encourage fiscal responsibility through municipalities, the new grant

system brought into place now - is he saying that the councils in the past,

under the old system, were not fiscally responsible for their decisions

pertaining to municipalities in the Province? Because if it is, that is a slur

on municipalities in this Province.

MR. SPEAKER: The hon. the Minister of Municipal and

Provincial Affairs.

MR. HOGAN: Thank you, Mr. Speaker.

No, Mr. Speaker, it is not a slur on municipalities, and I am

not saying that before this municipal operating grant was brought in that

municipalities were not fiscally responsible - they were certainly fiscally

astute, because I was one of them, and the system was open to manoeuvering that

municipalities did not actually live up to their part of the bargains and their

part of debt retirement and so on, the way that an equal share should be, and

the new grant system fixed that.

MR. SPEAKER: The hon. the Member for Humber East.

MS. VERGE: Thank you, Mr. Speaker. My questions are also

for the Minister of Municipal and Provincial Affairs.

On Friday, the minister denied that the government has

appointed ADM Don Peckham acting Fire Commissioner during the extended sick

leave of Commissioner Francis Ryan. Will the minister explain, then, why ADM Don

Peckham wrote a memo dated September 22, saying quote: "During the continuing

absence of the Fire Commissioner, I will assume any formal duties of the

Commissioner"?

Will the minister also explain why the current issue of the

newsletter of the Newfoundland and Labrador Association of Fire Chiefs and Fire

Fighters states, quote: "Mr. D. Peckham, Assistant Deputy Minister, will be

acting formally for the Fire Commissioner on all matters of policy"?

MR. SPEAKER: The hon. the Minister of Municipal and

Provincial Affairs.

MR. HOGAN: Mr. Speaker, the ADM continues to operate and

always will operate as the policymaker in that particular department, but by

law, as the hon. member should know, the Fire Commissioner, and, in his

absence,the Deputy Fire Commissioner, is legally responsible for that office,

and no one else. Neither the Premier, nor the Speaker, nor the Leader of the

Opposition, can fill that post. It is filled automatically by the Deputy Fire

Commissioner.

MR. SPEAKER: The hon. the Member for Humber East, a

supplementary.

MS. VERGE: Mr. Speaker, a supplementary to the minister.

I am, indeed, aware of the requirements of the law,

specifically

Section 7 of the Fire Prevention Act. I will quote that for the

minister, and ask why he is not complying with the law. The Fire Prevention Act

says, quote: "The Deputy Fire Commissioner shall act in the place of the Fire

Commissioner, in the absence of the latter during illness or other disability,

and when so acting, the Deputy Fire Commissioner has and may exercise all of the

powers and authority of the fire commissioner."

Why, then, is the minister having his ADM, who lacks any

technical expertise in fire safety, and who is working in his office under his

thumb with other responsibilities in charge of the formal duties of the fire

commissioner's office.

MR. SPEAKER: The hon. the Minister of Municipal and

Provincial Affairs.

MR. HOGAN: I did not lie. Mr. Speaker, the deputy fire

commissioner is operating as the fire commissioner, the ADM to the period that

she was speaking of, or the hon. member was speaking of was actually on

vacation. So I do not know - unless he carried the duties to wherever he was on

vacation - what he told his employees, as I understand it, was that on matters

of policy to refer them to his office and that the day to day operations and

indeed the fire commissioners duties would be carried out by the deputy fire

commissioner as is required by the Act.

MR. SPEAKER: The hon. the Member for Humber East.

MS. VERGE: Thank you, Mr. Speaker, a supplementary to the

minister. Will the minister issue a corrective directive stating that the deputy

fire commissioner is acting fire commissioner and shall continue to be acting

fire commissioner during the extended sick leave of the commissioner and shall

be fully in charge of the fire commissioner's office for formal duties and all

duties of that office?

MR. SPEAKER: The hon. the Minister of Municipal and

Provincial Affairs.

MR. HOGAN: No, Mr. Speaker, there is no need to issue

such a directive. The deputy fire commissioner has his working orders and he

knows how to carry out the duties of the fire commissioner as required under the

Act and he will continue to do so. Matters of policy will be referred to the ADM

and if the ADM cannot handle them it will be passed on to the DM and if the DM

cannot handle them it will be passed on to me and if I cannot handle them I will

pass them on to the Premier and if he cannot handle it I will pass it on to

Cabinet and if they cannot handle it I will give it back to Ms. Verge.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER (Lush): Order, please!

The hon. the Member for Humber East.

MS. VERGE: Thank you, Mr. Speaker. I thank the minister

for recognizing where the expertise lies in this -

SOME HON. MEMBERS: Hear, hear!

MS. VERGE: - the people in Humber East made the same

choice.

SOME HON. MEMBERS: Hear, hear!

MS. VERGE: Mr. Speaker, a supplementary to the Premier.

Is not the Premier concerned that the effectiveness of the fire commissioner's

office has been hurt and its objectivity compromised by the government's

designating as acting fire commissioner for 'formal duties,' or for 'policy

purposes', an individual with absolutely no expertise in fire safety, who works

in the minister's office under the minister's thumb and who has many other

responsibilities? Is not the Premier concerned about this matter?

MR. SPEAKER: The hon. the Minister of Municipal and

Provincial Affairs.

MR. HOGAN: I wish the hon. member would direct questions

of this nature to those who know about these matters. The Premier has to run the

Premier's office. If you say that the fire commissioner and the ADM is under my

thumb you should ask my thumbs not the Premier. The return of the fire

commissioner's duties to come under the hon. member, was a slip of the tongue on

my part, I forgot that you already had it and they took the fire department from

you and everything, they had to put it somewhere else to be run because you

mismanaged it. But no, there is no concern over the ability of the deputy fire

commissioner to run his office.

MR. SPEAKER: The hon. the Member for St. Mary's - The

Capes.

MR. HEARN: Thank you, Mr. Speaker, my question is also to

the same minister. The minister is indirectly responsible for the volunteer fire

brigades throughout the Province, I wonder if the minister will tell us if the

volunteer firefighters are covered by workers compensation?

MR. SPEAKER: The hon. the Minister of Municipal and

Provincial Affairs.

MR. HOGAN: The last I knew they were, Mr. Speaker.

MR. SPEAKER: The hon. the Member for St. Mary's - The

Capes.

MR. HEARN: Mr. Speaker, I wonder if the minister will

tell us if he considers that the members of the volunteer fire brigades are

covered while engaged in work directly related to their duties, such as

repairing and enhancing the equipment that they use?

MR. SPEAKER: The hon. the Minister of Municipal and

Provincial Affairs.

MR. HOGAN: I am not quite aware of the total

technicalities of the coverage, Mr. Speaker, but it is while carrying out their

duties as volunteer firemen that WCB benefits apply.

MR. SPEAKER: The hon. the Member for St. Mary's - The

Capes.

MR. HEARN: Mr. Speaker, I wonder then if the minister

would tell us why the Workers Compensation Board told a worker that as far as

workers compensation is concerned an injury sustained by a volunteer fireman

while doing volunteer work is not considered to be part of a volunteer fireman's

duty and is therefore not work related nor is it covered by workers

compensation?

MR. SPEAKER: The hon. the Minister of Municipal and

Provincial Affairs.

MR. HOGAN: I would take that one under advisement, Mr.

Speaker, and look into that specific case. I would have to know all the details

why they did not, but my experience with the Workers Compensation Commission

over the years has been that some of these could vary from case to case as with

the specifics.

MR. SPEAKER: The hon. the Member for St. Mary's - The

Capes.

MR. HEARN: A supplementary, Mr. Speaker, to the minister

responsible for Employment and Labour Relations and the Workers' Compensation

Commission.

I ask the minister if he would check into this because every

volunteer fire brigade throughout the Province is now extremely concerned that

they may not be covered unless they are directly fighting the fire. I will ask

him if he will check into the quote from the Workers' Compensation Commission

when they say: Generally speaking, firefighters are protected under the Act

while fighting fires or participating in fire drills or a fire drill tournament.

So consequently, if they are involved in all the other things that firefighters

must do, like repairing their equipment, fixing up the trucks and so on and

enhancing their - many of them build their fire halls and fire trucks as you

know; they have been told that they are not covered and I ask the minister if he

would check into that and give us a clear cut ruling, please.

MR. SPEAKER: The hon. the Minister of Employment and

Labour Relations.

MR. GRIMES: Thank you, Mr. Speaker.

I will have it checked into again because I know that issue

has been raised on a number of occasions and I have been involved in some

meetings where that has been discussed. The basic tenets of the Act indicate

that of course the whole idea is that an employee is covered in the performance

of duties that are required by the employer, but policies enacted by the

Workers' Compensation Commission itself, have extended the coverage to volunteer

firefighters 'in the course of their duties' but there are some questions as to

what 'in the course of their duties' actually extends to, and I will have that

checked again and report an answer to the House, Mr. Speaker.

MR. SPEAKER: The hon. the Member for St. John's East.

MR. HARRIS: Thank you, Mr. Speaker.

My question is for the Premier and concerns the importation

of garbage and other waste into Newfoundland.

Many people in the Province, Mr. Speaker, are convinced that

the government's lack of action in deterring the Long Harbour proponents, has

encouraged Conrad Black and Hollingner Northshore to believe that they can

successfully import garbage into Labrador. I want to ask the Premier whether or

not he has given any assurances, either written or verbal, to the Long Harbour

proponents or to Hollinger Northshore Inc. that, although difficult, if they

meet the environmental assessment requirements under the Act, they will in fact

be given approval to go ahead and import garbage into Newfoundland and Labrador?

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: Mr. Speaker, I am not sure on what the

member based his reference to Conrad Black. Because it had the same name as

Hollinger as a company that Mr. Black has an interest, therefore he jumped over

a massive chasm and came to an erroneous conclusion, I believe?

We have been assured that this Hollinger is a totally

different outfit, there is no connection at all so far as I know, so I do not

want the member's prefatory remark -

AN HON. MEMBER: (Inaudible).

PREMIER WELLS: What is it?

AN HON. MEMBER: (Inaudible).

PREMIER WELLS: I do not know who it is - some company in

Quebec. It has nothing to do with Black so far as I know. The member raised it,

I know it is not the issue, I am going to deal with the issue but I just want to

point out that like many other things that members opposite do, they jump over

great chasms of truth and land in this quagmire that they want to create.

Now, Mr. Speaker, we have given the proponents of neither

company any indication that they are assured of getting it or that there is a

good chance they will get it. As a matter of fact, I read an

article in the

Evening Telegram last week, where a Mr. Kennedy of North American Resources, was

saying: the Premier has been frank with us from the beginning, he told us we had

a right to make the application but that we would have a very difficult time

convincing people in Newfoundland and Labrador that this was the right thing to

do. Now, he made that statement. That is true. That is exactly what I said to

them. They have a right under the law that was put in place by hon. members

opposite. We do not quarrel with the law. The law provides for a fundamental

right of people to be heard. It does not prevent people from being heard. I am

quite surprised at the hon. member's position. The answer is, no, we have not

given any such assurances to anybody.

MR. SPEAKER: The hon. the Member for St. John's East on a

supplementary.

MR. HARRIS: Thank you, Mr. Speaker.

Has the Premier promised either the Hollinger group or the

Long Harbour proponents that they would not change the rules, that they would

not amend the legislation and that they would not in fact take the same position

they took while in opposition when the Bell Island project was proposed and say,

no, legislatively, policy wise, or some other way, say, no, to the American

garbage importation? Has the Premier promised to leave the rules the same, and

in fact change their position from the position they took in opposition and

said: if you meet the rules we will not change them. If you meet the rules you

can go ahead with this project.

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: No, Mr. Speaker, I have not promised

either Hollinger or North American Resources not to change the rules but I did

indicate, say a year and a half or two years ago, to Mr. Crosbie and ACOA, and

to ERCO at the time, that if they could put forward an acceptable proposal that

government would not say an automatic, no. I indicated that to ACOA, to Mr.

Crosbie, North American Resources, or the Albright and Wilson people, I think it

was I was dealing with at the time. That is the only statement I have ever made

to them along those lines, but I did tell them very clearly upfront the general

unacceptability of what they were proposing and the uphill battle they would

likely have. They said: we understand that, we are prepared to take the risk, we

are prepared to make the effort, and if we cannot make it acceptable then we

understand that it cannot proceed. They understand that from the beginning.

MR. SPEAKER: Question Period has expired.

Presenting Reports by

Standing and Special Committees

MR. SPEAKER: The hon. the Minister of Justice.

MR. ROBERTS: Mr. Speaker, if it is permissible I would

like to table here in the House - and I have copies for all members,

notwithstanding our new policy of not distributing everything everywhere - A

Comparative Analysis of Provincial and Federal Statutory Conflict of Interest

Regimes in Canada. My friend for Humber East, I think, was provided with a copy

of it Friday afternoon, if I understand her. This is simply an analysis of the

proposal that my friend, the Minister of Finance has brought before the House,

set against Canada - Ontario, British Columbia and Alberta - with respect to the

new conflict of interest legislation. As we will be debating it this week, hon.

members may find this of some assistance to them.

AN HON. MEMBER: Or next week.

MR. ROBERTS: Or next week. As long as we get a half-day

at Christmas I will have no objection, Mr. Speaker. But I do want a half-day at

Christmas. Anyway, I have a number of copies here for hon. members and for the

press.

MR. TOBIN: (Inaudible) Christmas!

MR. ROBERTS: A half-day Christmas, I say to my friend

from Burin - Placentia West.

MR. R. AYLWARD: A point of order, Mr. Speaker.

MR. SPEAKER: The hon. the Member for Kilbride, on a point

of order.

MR. R. AYLWARD: A point of order related to what the

minister just said about Bill 67, Mr. Speaker. I have no other way to raise

this. I know it is not strictly a point of order.

While the minister is commenting on his comparison

legislation there, I wonder would he inform members of this House of Assembly if

the legislation, Bill 67, which I saw for the first time today when I walked

into the House, will be forwarded to the Social Legislation Review Committee, I

believe it is called, the same as the Royal Newfoundland Constabulary

legislation was forwarded to it on Friday? There will be a meeting tonight, I

guess, on the Royal Newfoundland Constabulary. Could the minister tell us if

this legislation will be forwarded to the Committee, and when it will be done?

MR. SPEAKER: The hon. the Minister of Justice.

MR. ROBERTS: Mr. Speaker, this raises an issue that I am

not sure can be dealt with in a point of order. The problem, as I understand it,

is that there are no ground rules but there is a misunderstanding on how these

committees go forward, how they do their work.

I don't want to be argumentative, for once in my life, but I

am not sure I if I know what one means by the word "referred." The matter is

before the House. The government proposed to call it for second reading in the

normal course. If the Committee wishes to deal with it, they should feel free to

do so. That is a matter, in my understanding, for the Committee to deal with.

The government is neither for nor against it - it is for the Committee to deal

with, as I understand these things. If the Committee wishes to deal with it they

should feel perfectly free to do so, in my understanding of it.

What I would say before the hon. member gets back up - and we

have to be careful this doesn't turn into a debate, Mr. Speaker - the real

problem is there are no rules on it and there isn't even, it appears, a common

understanding among members as to how these committees should work.

MR. SPEAKER: The hon. the Member for Kilbride.

MR. R. AYLWARD: Mr. Speaker, I don't wish to debate it. I

would just like to point out to the hon. the minister that when this legislation

was brought in, or when we started on this Committee process, which was a good

reform in this House of Assembly, the ministers at the time would refer the

legislation to the Committee, the Committee would so some work, report to the

House and to the minister, and then the legislation would be tabled in the House

of Assembly. Maybe some changes would be made, maybe not. That was the way it

worked in the beginning and it seemed to be fairly successful at the time. It

seems since the minister came - and not to be unfair to him - it seems to be

only his legislation that is coming before the House that would be very

important to be referred.

I just point out to him that the way the system worked was,

the legislation was referred to the Committee, Committee did its work, reported,

and then the legislation was tabled in the House of Assembly.

MR. SPEAKER: The hon. the Premier.

PREMIER WELLS: Mr. Speaker, with great respect, the

member's assumptions are not totally correct. All legislation was not referred.

AN HON. MEMBER: (Inaudible).

PREMIER WELLS: The committees - okay, alright. Certain

legislation may or may not be referred. As the Government House Leader has also

said, if any committee wants specifically to look at a piece of legislation,

then nobody says the committee can't do that. The big concern that we have about

committees, from a government's point of view, is traipsing all over the

Province at great public expense. We want to make sure that that is kept under

control, that we don't let that get out of control.

Other than that, if the Committee wants to take a look at it

- there are two things we can't have, Mr. Speaker; they are, the costs getting

out of control and the time getting out of control. So with those limitations,

if the Committee specifically wants to look at it, I personally don't have any

problem with that.

MR. SPEAKER: Order, please!

I have allowed comments from two people on this side, and I

will allow the Leader of the Opposition to comment.

The hon. the Leader of the Opposition.

MR. SIMMS: Thank you, Mr. Speaker.

I just want to say, from my experience as House Leader and,

in the last year or so as Leader of the Opposition, I am not aware that the

committees have been abusive at all. In fact, most of them haven't even met,

other than once or twice in the last year, as I understand it. I know that

earlier on, when I was on a committee as Leader of the House for the Opposition

party a couple of years ago, that the committees I served on and sat in on a

couple of occasions did tremendous work, and they didn't abuse it. They had a

couple of public hearings here and there. The whole purpose is to give the

general public some chance to have input.

Now, what we should be doing here today is calling a spade a

spade. The reality here is, if the government wanted to do the job properly and

were properly prepared they could have had lots of time to present the

legislation in draft form to the committee, let the committee have a look at it,

and then bring it back to the House. They could have done that back last fall. I

think that may be an argument, but it certainly is a valid criticism as well,

Mr. Speaker. That is the problem. Call a spade a spade. They are trying to rush

and ram it through. That is what they are doing.

MR. SPEAKER: Order, please!

There is no point of order. The hon. member was doubtful

himself if it was a point of order, and we know there was no point of order.

Notices of Motion?

What is the hon. minister -

MR. GULLAGE: Making a report, Mr. Speaker.

MR. SPEAKER: Okay. Back to Presenting Reports by Standing

and Special Committees.

MR. GULLAGE: Mr. Speaker, I would like to table the

financial and statistical report for the Division of Social Assistance of the

Department of Social Services for the fiscal year, 1991-1992.

MR. SPEAKER: Further Reports by Standing and Special

Committees?

MS. VERGE: A point of order, Mr. Speaker.

MR. SPEAKER: The hon. the member for Humber East, on a

point of order.

MS. VERGE: Thank you, Mr. Speaker.

The first day of this fall sitting of the House of Assembly,

the Minister of Justice announced the government's intention to introduce in

this sitting amendments to The Child Welfare Act. Last week, the Minister of

Social Services gave notice of his intention to introduce those amendments. We

still haven't seen that bill. Mr. Speaker, I would like to find out from the

government if, indeed, they are intending to proceed with the amendments to The

Child Welfare Act and, if so, if they will be referred to the Social Legislation

Review Committee. They are of significant public interest.

MR. SPEAKER: The hon. the Minister of Justice.

MR. ROBERTS: Mr. Speaker, let me say two things: First of

all, I find it passing strange that hon. members opposite, who had the conduct

of this House for seventeen years and never made any effort to refer anything to

anybody, are now suddenly saying it is indispensable. Secondly, Mr. Speaker,

let's call a spade a spade, even when the spade is s-p-a-y-e-d as in the case of

the political efficacy of hon. gentlemen and lady opposite.

Now, Mr. Speaker, let me carry on and say, the answer to the

hon. lady's question is that the bill, I am told, is at the printers. I will say

to her, I will ask the Clerk to check, if it is not coming up today I will

undertake to provide her with a typescript copy. It is a very simple one-section

change. It changes a

section that originally went in the act when I was Minister

of Public Welfare twenty-five years ago. The hon. lady and her colleagues were

there for seventeen years and didn't change it. We are going to ask the House to

change it, and it will be done before Christmas at our request.

Notices of Motion

MR. SPEAKER: The hon. the Minister of Finance.

MR. BAKER: Mr. Speaker, I give notice that I will on

tomorrow ask leave to introduce a bill entitled, "An Act To Amend The Tobacco

Tax Act." Also, Mr. Speaker, I give notice that I will on tomorrow ask leave to

introduce a bill entitled, "An Act To Amend The Gasoline Tax Act."

MR. SPEAKER: The hon. the Minister of Municipal and

Provincial Affairs.

MR. HOGAN: Mr. Speaker, I give notice that I will on

tomorrow ask leave to introduce a bill entitled, "An Act Respecting Taxation Of

Utilities Act."

MR. SPEAKER: The hon. the Minister of Justice.

MR. ROBERTS: Mr. Speaker, I give notice that I will on

tomorrow ask leave to introduce a bill entitled, "An Act To Amend The Juries

Act, 1991, and The Elections Act, 1991."

Answers to Questions

For which Notice has been Given

MR. SPEAKER: The hon. the Minister of Works, Services and

Transportation.

MR. GOVER: Thank you, Mr. Speaker.

Mr. Speaker, on Friday the member for Kilbride asked four

particular questions relating to reclassification within the Department of

Works, Services and Transportation. Mr. Speaker, I have the questions and I have

the answers to the questions.

The first question was: Will the minister confirm that during

this pay period we will see some sixty-eight operational supervisors receive a

pay increase totalling some $240,000? The answer, Mr. Speaker, is no. During

this pay period, a total of sixty-eight permanent operation supervisors will

receive a total of $53,100 in retroactive salary. The operations supervisors

were reclassified from Hay level 13 to Hay level 15, effective August 26, 1992.

Question 2: While the minister is considering that question

will he also confirm to this House of Assembly that during the last month

another thirteen or fourteen assistant district supervisors, also on the

management pay scale, received increases, probably because of reclassification?

Mr. Speaker, the answer to that question is, during the past month a total of

seven assistant superintendents of operations were reclassified from Hay level

18 to Hay level 20. This brings the level of these officials to be similar to

the other thirteen assistant superintendents in the department.

Question 3, Mr. Speaker. The minister might recall that two

years ago, I believe it was, a former minister changed the policy in the

department of taking away overtime payments from these district superintendents

and assistant district superintendents for the winter months. Will the minister

find out when he is getting these answers, now that these people have been

reclassified from HL-13 to HL-15, that we now have to pay these people on an

increased salary for a twelve-month period rather than having to pay overtime

for a four-or-five-month period, as was in the past? Will these new payments

cost the taxpayers more than would have been the case had government not changed

the policy some two years ago? Answer: Two years ago as part of the restraint

measures, it was decided to eliminate overtime for operation supervisors, i.e.

foremen, and not district superintendents and assistant district

superintendents, as stated in the member's questions. Operation supervisors were

placed on a shift system in the winter months that results in their being

responsible for the roads in their area for one week and having the next week

off. This change resulted in an annual saving of $550,000.

It must be noted that there is absolutely no

interrelationship between overtime previously paid the operations supervisors

and the current reclassification. The two processes are mutually exclusive of

one another. It is estimated that the reclassification will cost approximately

$175,000 on an annual basis.

The classification process for all government, hospital, and

nursing home management employees is performed by a rating committee on the

basis of positions and descriptions submitted by employees. The committee is

comprised of a cross

section of officials representing government departments

and public sector agencies.

The final question is: When the minister is getting this

information, would he inform this House how many management staff in his

department have been reclassified upwards since the wage freeze was put in

place, particularly on the union members within his department? The answer to

that question, Mr. Speaker, is, during the period the wage freeze has been in

place, in addition to the operations supervisors there have been seventy-nine

reclassifications of management positions out of total of some 258 in the

Department of Works, Services and Transportation. The majority of these resulted

from reorganization and realignment of duties that were necessary as a result of

the restraint measures put in place some twenty months ago. So, there were

seventy-nine out of 258. By comparison, for the same period there have been 175

reclassifications for bargaining unit positions.

Mr. Speaker, I would just like to note that reclassifications

continue for both management and for bargaining unit employees through the

established processes of government. The wage freeze does not prevent

reclassification for management or for bargaining unit employees. I will table

the answers to the questions.

Thank you, Mr. Speaker.

Orders of the Day

MR. SPEAKER: The hon. the Government House Leader.

MR. ROBERTS: Mr. Speaker, as a preliminary matter in

accordance with the understanding we have arrived at, let me first of all move

that the House not rise at 5:00 o'clock this afternoon.

MR. SPEAKER: You have heard the motion. Is it agreed that

the House not rise at 5:00 p.m.?

SOME HON. MEMBERS: Agreed.

MR. SPEAKER: Agreed.

The hon. the Government House Leader.

MR. ROBERTS: Mr. Speaker, could we call Motion 4 and then

go into Motions 1 and 2 which are the Committee debate on the tax bills? My

friend, the Minister of Finance, is with us today so we will have a chance to

shine?

Motion, the hon. the Minister of Finance to introduce a bill,

"An Act To Amend The

Summary Proceedings Act, The Liquor Control Act, and the

Motorized Snow Vehicles And All-Terrain Vehicles Act,"

carried. (Bill No. 70)

On motion, Bill No. 70 read a first time, ordered read a

second time on tomorrow.

MR. ROBERTS: Motions 1 and 2.

On motion, that the House resolve itself into Committee of

the Whole, Mr. Speaker left the Chair.

Committee of the Whole

MR. CHAIRMAN (L. Snow): Order, please!

Bill 59. The hon. the Minister of Finance.

MR. BAKER: Thank you, Mr. Chairman, just a very brief

introduction to this piece of legislation. It is simply putting into legislation

what was announced in the Ministerial Statement a little over a week ago. This

amends the Tobacco Tax Act to increase the tobacco tax payable from 7.78 to

10.28 cents per cigarette, which is the 2.5 cents per cigarette increase

announced in the statement. This will add fifty cents to the cost of a pack of

twenty cigarettes.

Mr. Speaker, this is one of the regrettable measures that

were unavoidable if we were to properly handle the very difficult situation that

we found ourselves in about three weeks ago with the realization that our

revenues from Ottawa would be reduced by over some $80 million. We were forced

to bring in expenditure restraints, we were forced to do extra borrowing and

also we were forced to increase some taxes. This is one of the taxes that we

find it necessary to have increased. Thank you, Mr. Chairman.

MR. CHAIRMAN: The hon. the Opposition House Leader.

MR. MATTHEWS: Thank you, Mr. Chairman. I am requesting

that we get some of these colleagues near to me removed, Mr. Chairman, so we can

deal with getting on with the running of the House and try to get some of this

legislation out of the way. I am sure most of us want to have our Christmas

dinner at home, and for some of us to do that we have to go a fair distance to

get there. Some of us can get in our cars and be home in fifteen minutes but for

others it is going to take us five hours or so.

I want to have a few words about Bill 59, Mr. Chairman, "An

Act To Amend The Tobacco Tax Act". As the minister said - I guess my first

reaction, when the minister stood in his place on the morning of the Friday

before last, to bring in his mini-Budget, his economic statement was - I

wondered, really, if we have not passed the point of diminishing returns with

our tobacco tax and our liquor taxes. I would be interested in hearing the

minister comment, as I am sure before these measures were implemented, the

officials of the Department of Finance must have done an analysis on how much

government realistically expected to get from increasing cigarettes by, I think

he said 2.5 cents a cigarette, fifty cents a pack. How much revenue will

government really derive from that? I guess that is the question. I wonder if

the minister can inform the House whether there was an analysis done -

MR. SIMMS: How many packs do they sell every year?

MR. MATTHEWS: I don't know how many, I would say, quite a

few packs.

MR. SIMMS: Multiply it by fifty cents.

MR. MATTHEWS: But I am just wondering what the minister's

officials are telling him really with the - we keep piling on taxes on tobacco

and alcohol, on liquor, booze, beer and so on. Have we reached that point yet

where it really doesn't make that much difference to the bottom line in the

Province? Now, I mean, I realize fully the kind of a bind the minister found

himself in; he has bond rating agents watching him from all around, all over the

country. He has been over to New York, I guess, not long back - called over to

New York, they said, 'Get over here. you are under credit watch. Come over and

have a chat to us.' I heard the minister himself today on the news media on my

way driving in from the Burin Peninsula, saying where he had been down in New

York and we seem to be okay for now, but there was no guarantee that the

Province would not go under credit watch at any time, I believe that is what the

minister said. But my point is, realizing why the minister had to take some of

these measures, I guess it was to satisfy the bond rating agencies so that they

could have a look at what measures the government was taking to try and

alleviate some of their fears on generating additional revenues, cutting

expenditures and so on, so I am wondering if the minister -

MR. TOBIN: The minister should listen.

MR. MATTHEWS: - I am wondering if the minister, when he

responds and so on, could perhaps inform the House whether or not the officials

of the Department of Finance have had a look; I am sure over the years this has

been a concern for many, many people. You keep piling on taxes, when does your

luck run out? Increase taxes and then people buy less, so your bottom line in

the Province does not improve anymore okay, or, the other side of it is of

course, that you encourage illegal activities. You know, there is a lot of that

kind of activity, there is a lot of from what I understand, of what they call

bootleg cigarettes that are coming in, and I see the Minister of Municipal and

Provincial Affairs smiling, thinking I am talking about St. Pierre and Miquelon

AN HON. MEMBER: (Inaudible).

MR. MATTHEWS: Well, wherever, but as well they are coming

across the borders into Canada and they are finding their way into the Province

across the Gulf and Argentia and other ways, so I am just wondering really, when

you look at what the minister is doing, if really that he is going to collect

any more revenues - particularly on this tobacco tax act. I would be quite

interested to see when the minister does an analysis at the end of this fiscal

year, to see just how much tobacco revenues have increased in the Province from

the time of the mini-statement or the mini-Budget until the end of the fiscal

year.

Maybe the Province will not take in any more money in this

three or four-months period than they would have if they had not increased taxes

and that is what I would be interested in seeing at the end of the year; really,

was there any difference? Did the Province pick up any additional revenues

because of this Bill 59? So I hope the minister has listened to what I said,

and, when he responds again, I would be interested in him telling the House,

whether there was a comparison analysis done and really does he expect to get

additional revenues from the increase in tobacco products? So that is all I have

to say on it and all the questions I have to ask, Mr. Chairman.

MR. CHAIRMAN: The hon. the Member for Menihek.

MR. A. SNOW: Thank you, Mr. Chairman.

Mr. Chairman, I am pleased to have the opportunity to speak

on this particular bill, Bill 59, "An Act To Amend The Tobacco Tax Act (No.3)".

Mr. Chairman, I wholeheartedly agree with the previous speaker, the Member for

Grand Bank, when he suggested that we have finally met the point of diminishing

returns with regards to taxation in this Province, and whether it is gasoline

tax, tobacco tax, income tax or whatever it is, I mean we are creating a

tremendous underground economy here. The government is driving people to the

underground because of the heavy tax burden that is out there, and we are

creating an underground economy and of course, underground economies mean that

the government does not get any taxes whatsoever out of the action in that

economy and does not get any activity in the economy, they cannot get their

hands on the taxes.

The underground economy is being created because of the heavy

tax burden. Now, Mr. Chairman, whether this is being - I will not say it has

been a deliberate attempt by this government to create this large underground

economy but the heavy taxes that this government has seen fit to levy, and the

Minister of Finance alluded to it when he spoke, he said they needed it because

they kept finding themselves being constrained -

AN HON. MEMBER: (Inaudible).

MR. A. SNOW: - Mr. Chairman, the hon. Minister of Finance

suggested that they had to increase taxes because of the constraints that they

found themselves in and the revenues are going down but expenses have gone up.

Now, Mr. Chairman, what I would suggest they would have to do, is similar to

what occurs in quite a few other jurisdictions of course, is that you have to be

more creative to stimulate more action in the economy so as to get more revenues

to the government; that is what you have to do.

Now with this particular act, the Tobacco Tax Act, in my area

we are in a border situation in western Labrador, one of the few places in this

Province that is actually right into a border situation, where they are

competing with people across the border - and with the gasoline tax and the

tobacco tax we are directly affected.

Mr. Chairman, with regard to the tobacco tax, of course, this

was addressed several years ago in western Labrador. As a matter of fact, I feel

proud of being one of the people instrumental in convincing the previous

administration that they had to come in with a similar type of tax structure

that other provinces have - and other provinces do have it - where in border

situations they have graduate taxes. The Province of Quebec, as an example, has

it in gasoline. They have it in tobacco.

Now in our area I was instrumental, along with many other

people in western Labrador, to convince the previous administration, and my

involvement was as a mayor of a community and also as a member of the economic

council. I had the opportunity to meet with Cabinet and suggest to them that

they would have to implement a type of rebate system or tax system that would

allow the entrepreneur in western Labrador to be able to compete on a level

playing field with the businessman over in the neighbouring Province of Quebec.

The previous administration recognized that and they

implemented a tax rebate system on tobacco so that when the price of cigarettes

did increase with taxes we could have a graduate tax or a rebate tax so that the

actual price of cigarettes could be lowered in western Labrador.

What was happening, people were being influenced to go across

the border. It was our mini, our micro, cross-border shopping if you will,

because that is exactly what was happening. People would leave Labrador City and

Wabush, drive to Fermont, pick up their cigarettes, because there was a

difference of $2 a pack in the price.

AN HON. MEMBER: (Inaudible).

MR. A. SNOW: Mr. Chairman, when people get into the

Cabinet room and leave the classroom, they do not have any concerns anymore. All

of a sudden they go up to a $120,000 a year job. They forget the classroom. They

get into the board room, the Cabinet room, and they forget all about it.

The hon. Minister responsible for Employment and Labour

Relations does not understand anymore. He does not understand the common plight

of individuals. He cannot relate to people only making $50,000 or $60,000 a year

anymore. When you are making $120,000 or $150,000 a year you forget all about

the fellow who is only making $50,000 or $60,000. So he cannot understand that

$2 a package, if you are smoking -

AN HON. MEMBER: (Inaudible).

MR. A. SNOW: Mr. Chairman, the hon. Minister responsible

for Employment and Labour Relations cannot relate to the ordinary person only

making $50,000 or $60,000 a year. That is what has happened to him. That is why

you are in so much trouble.

AN HON. MEMBER: (Inaudible).

MR. A. SNOW: Now, now, listen. I would say you are

probably 90 per cent in my district. Keep it up and you might even find -

AN HON. MEMBER: Randy will have his shot at you.

MR. A. SNOW: He may - but to get back to what I am

talking about, what we have to be is more creative. I specifically direct my

remarks to the Minister of Finance. What we have to be is more creative because

right now, today, there is a $2 difference in a package of cigarettes in western

Labrador and in eastern Labrador in Quebec - a 20 kilometre distance. Because of

the border situation there is a $2 difference in the price of a package of

cigarettes. You can easily see what will happen. If you could get your

cigarettes in the Goulds, as an example - now I will bring it back to some of

you people who have not - you probably go outside the overpass as far as the

Goulds, so if you went to the Goulds and you could buy a package of cigarettes

$2 cheaper, you know that people in the Goulds would be selling us cigarettes,

right? Even a townie would figure that out. The hon. Member for St. John's South

nods his head and says, yes, I would go to the Goulds to save $2 on a pack. He

would, and most other people would.

So what I am suggesting to you is that that rebate that is in

place in western Labrador today, to allow the businesspeople in western Labrador

to compete on a level playing field, has to be changed. Whether it's an

amendment to this Bill or whether it's through a regulation it has to be

changed. Now I think it's just through a regulation. The Minister of Finance can

check on it.

This is something that's a bit more creative. Because this

will allow people to stay at home, spend their money at home. While it's not

earth-shattering to the people from St. John's - the Minister of Finance says

that's balderdash and he says he shouldn't be doing it. No, I'm sorry, the

previous Minister of Finance. The present Minister of Finance nods that he's

going to check it.

What I'm doing, I would ask the minister to check that,

because it does mean that we're going to lose more than - it's not the two

dollars a pack in revenue that we're going to be losing. What we have to look at

is that when people go up to this neighbouring community in another province and

they start buying the cigarettes, they end up buying their groceries, their

clothing. The next thing you know we're losing a lot of the activity in our

local economy. Very similar to the cross-border shopping that occurs between

Canada and the United States, Montreal - Plattsburgh, that type of thing,

Windsor - Detroit, all those places. Toronto down to Buffalo or Niagara Falls.

All those places.

In our case yes, it's a micro-example. But it's important in

western Labrador. I believe that the same principle applied. That we should be

lowering it through the rebate system. I hope that the Minister of Finance would

find through his officials that they could be able to change the rebate system

in western Labrador so that the people in Labrador West, the business community,

can offer the same prices to the people in western Labrador as the people

selling cigarettes over in Fermont can do to their citizens.

This is going to create more economic activity within our own

tax regime, our own communities in Lab West. That's going to create more

activity and more employment. Of course, then that means that the income taxes

and all other taxes - money being raised through other areas - will accrue to

this Province. That's all I want to do. Yes, it's a benefit that people in

western Labrador will receive, but in the long run we'll see more revenue

accruing to this Province because of this type of action. I hope that the

Minister of Finance - in discussions I had with him before he seems to be a

reasonable man. This Minister of Finance. The other Minister of Finance just

didn't know what he was doing. He couldn't do his sums whatsoever. I don't know

what he taught at the University but it definitely wasn't economics.

Anyway, I'm sure that the present Minister of Finance will

ask his officials, or at least I hope so, that he would get his officials to

check out the rebate system. Because at present I believe it's $4.06 a carton.

We're going to have to change that rebate system to reflect about a two dollar

difference in price per packages of cigarettes. So that the rebate system now I

would suspect is going to have to change drastically to allow - again, I want to

reiterate this and to emphasise.

This is to allow a level playing field for the businesspeople

in western Labrador to compete with the businesspeople in the neighbouring

province because of the difference in taxation on the tobacco. This will in the

end result create more economic activity and thus more revenues into the

Treasury of this Province. That's what I'm saying about being more creative.

You've got to be more creative. If you do this, Mr. Speaker, I think that the

end result will mean that there'll be more revenue accruing to this Province and

also stimulate more activity in western Labrador. Thank you very much.

MR. SPEAKER: The hon. the Minister of Finance.

MR. BAKER: Thank you, Mr. Speaker. Some points that I

feel I should respond to. First of all, the concept that we may be reaching the

point of diminishing returns in terms of taxation on tobacco.

Both hon. gentlemen opposite have a point that we may be in

fact very close to that, or reaching that. There's no doubt about that. In terms

of the tax on alcohol, we feel that we have reached that point. The last time

that was increased it resulted in no increase in revenues and we feel that is as

far as it could go, and studies indicate that we are the point of diminishing

returns there.

With regard to cigarettes, the situation is not clear;

however, we will now be slightly above the other Maritime Provinces in the tax

on cigarettes. I guess we will just have to see what happens. Unfortunately -

nobody likes to raise taxes, but we had to come up with some extra revenue. This

was one of the avenues that we chose, and whether we reach the point of

diminishing returns I guess we will see as the year goes on.

I would like to suggest to members opposite that one thing

that may be happening that will cause a reduction in the use of cigarettes is

the popularity of the nicotine patch. That itself may cause a large reduction in

the consumption of cigarettes, so we will see anyway during the year what impact

either the point of diminishing returns or the patches have on the consumption

of cigarettes.

With regard to bootlegged cigarettes, I would concur with

members opposite that that is a problem and always has been, even if the

difference in price if fairly small. There are probably cigarettes that find

their way into the Province from St. Pierre or from some mainland points. All I

can say to members opposite is that we have to be more diligent in terms of

checking for cargoes of bootlegged cigarettes. That happens, and it is a fact of

life. Whether this particular increase in tax will cause an increase in

smuggling or not remains to be seen, but again we have to be particularly

vigilant with regard to the smuggling.

The Labrador rebate the hon. gentleman mentioned in his

speech, and mentioned to me previously, I am going to have a look at that. My

feeling is that this either would be dealt with by regulation or by a separate

bill. It would not be in a motion form, which is usually used for raising taxes.

So it would be probably in a separate bill or in a regulation, but I can assure

the hon. member that whatever the situation was before should be maintained. So

if the changes are required, they will be made, but I will check into that and

get back to him later on, just as quickly as I can.

AN HON. MEMBER: (Inaudible).

MR. BAKER: Yes, I understand that. I will get back to the

hon. gentleman as quickly as I can, but I want to assure him that our intention

was not to change the situation from what it was before. That was not out

intention.

With regard to his comments about being inventive and

different and so on, and things to do to stimulate the economy, one cannot

dispute motherhood. There has to be some better way to do things; but I remind

hon. members that we are in very difficult times - when I say 'we' I do not mean

this Province. I mean the country. I mean North America, and perhaps most of the

world.

We are going through some difficult times. A real

restructuring is going on, and while this is going on it is impossible for us

to, for instance, at this point in time forego sources of revenue. We would all

like to. We would all like to reduce the RST. We would all like to reduce

personal income tax. We would all like to reduce taxation, and I would love to

see the day when I could stand up in this House and announce reductions in

taxation, and other measures to stimulate the economy. At this point in time we

do not have that leeway nor luxury.

I agree that a stimulus would probably generate revenue.

AN HON. MEMBER: (Inaudible) is not a luxury.

MR. BAKER: No, it is a luxury, I remind the hon. member,

because we are in a situation right now where in the next four months we had to

handle and reduce a projected $150 million deficit. We had to drastically reduce

that. A tax stimulus that we give now might reap benefits two years down the

road, but we have an emergency situation to handle right now. In that emergency

situation if you lose $40 million by reducing the RST one percentage point, if

you lose $40 million that way, you're not going to get $50 million back

immediately. It doesn't work that way. So we cannot afford, because of our

precarious credit rating, to do that kind of thing. We don't have the leeway. It

all has to do with the precariousness of our credit rating.

So I'd dearly love to be able to do something different. But

the leeway is simply not there at this time. I hope to see the time when the

leeway is there. I really wish that it would have been possible to have

equalization payments from transfers increasing every year at the rate of 8 per

cent and 10 per cent a year. I would have loved to have seen that. We would have

had $800 million more in the last three years than we've had. A tremendous

amount of money. I would have loved to have seen that. The reality is, Mr.

Chairman, that the money is not there. A very difficult situation. Reluctantly

we have to take these measures.

I'd like to end by assuring members opposite that if the time

comes when things turn around that I would only be too happy to very actively

stimulate the economy at a time when we're able to do so. I'd say it's

unfortunate that this kind of stimulation was not done during the boom years of

the 1980s. Really unfortunate.

So, Mr. Chairman, with these few words I'd like to move the

motion, Motion 1.

Resolution

That it is expedient to bring in a measure to amend the

Tobacco Tax Act.

Motion, that the Committee report having passed the

resolution without amendments and a bill consequent thereto, carried.

MR. CHAIRMAN: Bill 60. "An Act To Amend The Gasoline Tax

Act (No. 2)."

The hon. the Minister of Finance.

MR. BAKER: Thank you, Mr. Chairman. The introduction for

this one is basically the same as the introduction for the previous one. This is

a bill that is necessitated by the recent financial statement where we had to

get into some sources of revenue. I believe the revenue sources this year will

increase revenue this year by some $10 million in total.

This particular revenue source is to amend the Gasoline Tax

Act by increasing the gasoline tax payable from thirteen point seven cents to

fifteen point seven cents per litre for gasoline - that's a two cents per litre

increase in the cost of gasoline - and from fifteen point six cents to seventeen

point six cents per litre for diesel fuel, as announced in the ministerial

statement.

So, Mr. Chairman, essentially this is a two cent per litre

increase in the price of gas and diesel fuel to raise revenues to handle the

emergency situation that we find ourselves in.

MR. CHAIRMAN: The hon. the Member for Fogo.

MR. WINSOR: Mr. Chairman, just a few words on this Bill,

and maybe more of an enquiry as to - we're concerned about gasoline prices in

general. I hope the minister gets up and explains why we have such a wide

discrepancy in this Province in the price of gasoline. I see the Minister of

Energy is in his place. Because it's interesting, just before I came down from

my office I had a call from constituents of mine in Fogo who wanted to know how

much gasoline had gone up per litre. I told them it had gone up two cents per

litre. They said: how come it's gone up four cents a litre at the gas pumps in

Fogo? I said: the legislation said only two cents. He said a litre of gasoline

in Fogo today is costing sixty-eight point nine cents per litre. In Gander it's

costing sixty point one, and less than sixty at the self-serve stations. That's

AN HON. MEMBER: (Inaudible)?

MR. WINSOR: Pardon?

AN HON. MEMBER: Fifty-eight point four (Inaudible).

MR. WINSOR: Fifty-eight point four and sixty-eight point

nine in Fogo. Now, Mr. Chairman, that's a twelve or thirteen cents differential

per litre. That's just too much money. If we talk in terms of gallons we're

talking fifty to sixty cents a gallon. That's just too much a difference.

I've checked with the oil companies and they tell me that the

cost of transporting fuel from Lewisporte or Gander, wherever, to Gander plays

into it but only at the tune of eight-tenths of a cent per litre. 68.9 cents

this morning, it was 64.9 cents prior to the announcement of going up two cents

and - 68.9 cents, Mr. Chairman, and I wonder if there can be - we just see the

Minister of Municipal Affairs trying to regulate utility companies in this

Province, I wonder is there any thought ever given to some kind of a regulatory

agency to look at the price of gasoline, Mr. Chairman, because that is gouging

of some sort. If it is 58 cents a litre in St. John's and 68.9 cents in Fogo,

Mr. Chairman, that is a lot of difference, that is too much difference. In fact

I was out on the west coast this summer and I think gas was selling at 53 cents

a litre out there and I was paying 64 cents at home. Subsequently it is gone up,

but now, Mr. Chairman, we are talking too big of a range in taxes. The Member

for Carbonear said it is was 58.4 cents at some place here in St. John's, that

is fifty cents on a gallon of gas, Mr. Chairman, I realize why the minister did

it, I am not sure that it is going to be - again another tax that is going to be

placed on consumers because now of course the cost of freight is going to go up,

as trucking companies and everyone else have to offset the lost of earnings that

they would normally have from the delivery of their goods, Mr. Chairman. The

only break that we have had as consumers this summer, has been gas wars as they

have been called, where the individual service stations have lowered the price

of gasoline because of the increased competition. Government turns around and

socks it to us again, increases the price of gasoline, some 8 cents or 9 cents a

gallon or 2 cents a litre, Mr. Chairman, I cannot support that kind of

legislation because it is too hard on the pocketbooks of Newfoundlanders.

MR. CHAIRMAN: The hon. the Opposition House Leader.

MR. MATTHEWS: Thank you, Mr. Chairman, just a few -

AN HON. MEMBER: (Inaudible).

MR. MATTHEWS: Yes, do not get me riled up now, I say to

the Minister of Employment and Labour Relations and the Minister of Forestry, do

not get me riled up, we could be talking gasoline tax until 7 o'clock.

Mr. Chairman, on a serious note, my colleague form Fogo

brought up a very legitimate point and I hope the Minister of Finance takes note

because why should companies or retailers or whoever, out and about the

Province, I mean the government brought in this new tax measure okay, looking

for a 2 cents per litre increase and now we see in the case of the hon.

gentleman's area that companies have increased their gas prices by 4 cents a

litre, now why should they be permitted to do that? Because what they have done

is they have done it under the guise of a tax increase which should have only

put it up 2 cents a litre and now they have put it up 4 cents and when you look

at - I mean I wonder did anyone ever - and I see the Minister of Mines and

Energy there as well, did anyone ever really seriously - I mean 68.9 cents out

in Fogo area and 58.4 cents on Newfoundland Drive, I believe the Member for

Carbonear said today. I mean you could understand that there would be a trucking

cost associated with moving the stuff further away from the centres but not that

much, my God in Heaven, that is outrageous, outrageous.

The other thing that I have noticed in my own area of the

Province and particularly in some, we call it medium sized towns, what we find

happening is that they make an agreement amongst themselves. We think that

competition is good, right, which it should be for the consumer, competition

should be good but you know what is happening, I know one town in my district,

do you know what they did? They made an agreement amongst themselves, that they

keep the prices up, not competing against each other to drop it. Four or five

gasoline outlets, that is what they have done, they have agreed. On one occasion

one fellow said yes that he was going to drop his prices and the other three or

four almost lynched him. Almost lynched him because he was doing something

wrong, they said: you are not allowed, you should not be doing this, because he

had just set up a new outlet, a new gas outlet by a company that was not there

before. They got really, really annoyed at the thought that he was going to

offer gasoline to consumers at lower than they had agreed amongst themselves to

offer. They just about tarred and feathered the poor fellow. So this happens too

and particularly in smaller communities. But there is one other issue on

gasoline, I know I am straying a bit, but whoever is responsible over there for

this, whoever is responsible for it, Consumer Affairs or Mines and Energy, but

there is another I say, another real fraud, another real fraud going on with the

gasoline business in this Province and that is when you pull up to the pumps and

you see these higher grades, supposedly higher grade gasolines, where you have

your regular and you have your supreme, you have your whatever, okay? I will

tell you something, in a lot of cases where you get the supreme for the higher

grade gasoline marked on the pump that you are supposed to be paying so many

cents a litre more, you know something, you are not getting the higher grade

fuel, you are not getting it -

AN HON. MEMBER: (Inaudible).

MR. MATTHEWS: Pardon?

AN HON. MEMBER: Can you verify it?

MR. MATTHEWS: Yes, I can verify it.

AN HON. MEMBER: It is a fact.

MR. MATTHEWS: Yes, it is a fact. You drive up thinking

you are getting higher grade fuel and you are not getting it, you are getting

the same stuff that is in the regular tanks with the price different, you are

getting the same gas.

AN HON. MEMBER: Have there been charges laid on it?

MR. MATTHEWS: No, there have not been. I know there have

been some people who made representation to Consumer Affairs, federally I guess

it is and so on, but it is something that I wanted to say - who is in charge of

Consumer Affairs on the other side, by the way?

AN HON. MEMBER: Justice.

MR. MATTHEWS: The justice minister. Well someone has to

help the finance minister bring this to the attention of the justice minister

because it is happening out there. People are paying the higher grade price and

getting the regular fuel; the only thing different is the price and what it is

supposed to be, that is happening out and about this Province. It is happening

and it is very, very serious because that should not be happening, there should

be some protection there for the motorist, for the consumer who drives up to a

gas pump and pays for the higher grade fuel and is getting the lesser grade.

There should be something done about that, I say to members opposite and they

should check into it-

AN HON. MEMBER: (Inaudible).

MR. MATTHEWS: Yes, and it is happening, I assure members

it is happening in this Province in different areas of the Province, maybe in

all areas of the Province, but it is something that I would like to see somebody

really take seriously and check into it because it is illegal. But having said,

and I want to say to the Minister of Finance again and to whoever is

responsible, for the government to bring in a measure to - we all know the

reasons again, the same as the tobacco tax, they are into a financial squeeze;

they have to try and satisfy the bond rating agencies; they have to demonstrate

to them that they are going to increase revenues and this is a measure to do it.

But again, why should someone then increase their gasoline prices by four cents

a litre when government is only requiring them to do it by two, and of course

they seize on the opportunity, where the minister announced an increase that

they did not jack the price up two cents a litre on the pump, what did they do?

They jacked it up four cents a litre.

Most people will not notice that, they go and they pay a

little bit more for their gas and say that is that provincial government again,

that is Clyde Wells in there who - it is the reason why they are paying more for

their gas but they are paying two cents a litre more than they should be paying

in most cases. That is the problem -

AN HON. MEMBER: No, it is not, do not blame it on the

business, blame it on (inaudible).

MR. MATTHEWS: No, no. There are two people on whom they

should blame it. One is the government for putting the two cents a litre on it

and the other one is the retailer who is putting another two cents on it because

he is going to adjust the pumps so why not whack it up another two for me.

AN HON. MEMBER: (Inaudible).

MR. MATTHEWS: Exactly and that is happening so it is

something I hope the government takes note of because I make the remarks quite

seriously. We all know why government brought in these measures. I do not know

if it is going to make a lot of difference at the end of the day, come the 31st

of March, when we see the end of the fiscal year. Government is going to have to

bring in another Budget some time between now and then and it will be quite

interesting again to see just how much revenues have increased because of the

measures that were announced by the minister the Friday before last. It would be

quite interesting to see, really. Did the measures that were announced by the

minister increase the revenues? I am sure we will look forward and scrutinize

the documents when - if we get the chance to do that, if we get the chance, we

would be most interested in seeing the - what is that?

AN HON. MEMBER: What would cause you not to?

MR. MATTHEWS: What would cause us not to? Well, I mean,

there could be certain events happening between now and the tabling of another

Budget, I say to the Minister of Finance, and there is no doubt that some of us

will be here to scrutinize the documents but I do not know how many and who will

be tabling the documents of course. We are not quite sure today, who will be

tabling and who will be scrutinizing, I say to the Minster of Finance, it could

be a whole change. Maybe the Minister of Finance might be scrutinizing the new

document brought in by a new Minister of Finance.

DR. KITCHEN: Pigs might fly.

MR. MATTHEWS: Yes, pigs might fly, the former Minister of

Finance said. Pigs might fly. I say to the Minister of Health the first time

that a helicopter flew over Garnish the story is that this old lady got quite

frightened and said that Uncle So and So's pig had gone to wing. She thought

indeed that pigs could fly. I do not know what she thought was going around but

that is how she described the helicopter, the pig had gone to wing. I say to the

Minister of Finance we will be quite interested to see at the end of the day how

significant revenues have increased between now and the end of March once we get

a chance to have a look at it all.

Having said that, Mr. Chairman, I make the remarks quite

seriously. I see the Member for Mount Pearl is here. He arrived late as he

informed us he would, so that is where we are, on Bill 60. We are doing Bill 60

now,

An Act To Amend The Gasoline Tax Act. We did the Tobacco Tax Act before.

Since you informed us you were going to be late did you want to have a few words

on Bill 60?

MR. CHAIRMAN: The hon. the Member for Menihek.

MR. A. SNOW: Mr. Chairman, I have just a few remarks on

Bill 60,

An Act To Amend The Gasoline Tax Act. I just want to make a few

comments about what the previous speakers said. There was some suggestion that

some businesses out there are taking the opportunity to increase taxes to gouge

more money from consumers. I think by and large most businesspeople in this

Province do not take opportunities like that, they do not necessarily go out and

attempt to take advantage of consumers because there has been a tax increase. I

think in most cases businesses in this Province operate in a very responsible

manner and what they quite often have to do, and people do not understand, is

there has to be a margin of profit that businesses need to operate and they

operate on a margin of profit rather than on a fixed profit, Mr. Chairman, in

the sense of cents per gallon or cents per litre.

When tax increases go up, because of the profit margin having

to be maintained they see that the price has to go up a couple of percentage

points, if you will, over and above the taxes to maintain that margin of profit.

Of course in other cases dealers have found themselves in localities where

transportation is higher. That may be a case that occurred in some island

portions of this larger island part of the Province, Mr. Chairman. I thought

with a little bit of delight when the Minister of Health talked about pigs might

fly in reference to a comment made by the hon. Member for Grand Bank, I would

say that pigs have a greater chance of flying than any of the previous Budgets

he brought down, Mr. Chairman, because they certainly did not fly in this

Province, I can guarantee. The deficits went ballooning, Mr. Chairman. They were

more than 80 per cent out. They were 500 per cent out in the last one. With

regard to the Bill I am speaking about here, in my particular district, in

Labrador West and the East now, we are in the dawning of an new era of

transportation into western Labrador. Four or five years ago with the opening of

what we commonly refer to in western Labrador as the Baie Comeau Road, we found,

since then, that about 80 per cent of the consumable freight in western Labrador

comes in on tractor trailer now.

Just recently, listening to newscasts, one of the first

tractor trailers, having gone all the way around the so-called circle route,

across the Island portion of the Province, up through Nova Scotia, through New

Brunswick, down through Quebec, in through western Labrador, has arrived. The

tractor trailers from St. John's have gone all the way around the circle into

Happy Valley - Goose Bay. Just this past weekend I think it was Newfoundland and

Labrador Hydro and somebody else had hired rigs and that is what happened.

I can remember the excitement in western Labrador when this

first started happening, and it was exciting. Now we see the mining companies in

western Labrador able to get freight from Montreal in about a maximum of

twenty-four hours - out of Montreal to Labrador West. That is phenomenal, when

you stop to think of it. That makes that mining company more competitive. They

are competing in a global economy, but when they are able to - instead of having

to fly in parts now they only have to wait twenty-four hours to get parts

delivered from Montreal or Toronto. Probably it might take an extra ten or

twelve hours from Toronto. That is phenomenal for the amount of downtime that

they do not have to lose anymore. It makes them more competitive in the global

economy, which is good for the economy. It is good for our local industry.

Our groceries are also brought in the same way now. We find

that we have a - as a matter of fact, I find that shopping here in St. John's

now, when I buy fruits and vegetables at home in Labrador they are a lot fresher

and a better price in western Labrador than they are here. That is because I am

closer to the supply coming out of central Canada. That is why that is

occurring.

AN HON. MEMBER: (Inaudible).

MR. A. SNOW: Pardon?

AN HON. MEMBER: (Inaudible).

MR. A. SNOW: Taxes is what I was complaining about last

week. Taxes that his government placed on the residents of western Labrador was

highest. It was really high in western Labrador - not the prices that people are

having to pay, or the quality of groceries that they buy there.

Now I can see what is going to happen over in eastern

Labrador, if I may call it that, over in the Happy Valley - Goose Bay region.

You are going to find that it is going to be more grocery items. That type of

consumer item is going to be coming in on tractor trailer now. The

businessperson operating a business in central Labrador, Happy Valley - Goose

Bay, will not have to warehouse for six and seven months.

There are going to be more tractor trailers coming in is my

point. They come in from Quebec. The can of beans, when it comes down to St.

John's, leaves Montreal, comes down around, comes into St. John's, and is going

back up again, right now; but a businessperson warehouses that can of beans, if

you will, in Happy Valley - Goose Bay, and he warehouses it for about six or

eight months and sells it. There is a cost in storing that item for six months

in a warehouse, because of the shipping season in Happy Valley - Goose Bay; but

with the change - this dawning of a new era - is now going to permit

businesspeople to be able to get their goods in from maybe St. John's or central

Canada - I do not know where they will come from - but the goods will be able to

come in within twenty-four hours shipping. So that is a new industry starting in

Labrador - shipping. That is another industry coming in.

Now in order to have these vehicles coming in, you know what

happens today? Right now today these tractor trailers that are coming in and

going all the way to Churchill Falls, or down in Happy Valley - Goose Bay, or

stopping in western Labrador - do you know where they fuel up? In Quebec - down

in Baie Comeau. Do you know why? They fuel up down in Baie Comeau because the

prices there on diesel fuel are so much cheaper, which is what is included in

this gasoline tax act. The diesel fuel up in Baie Comeau is a lot cheaper than

what they pay in western Labrador. You would ordinarily fuel up your rig in

western Labrador if you were going to go on to Churchill Falls or you had to go

back to Baie Comeau or back to Quebec, back to Montreal, back to Toronto, or

wherever it is coming from.

Because our fuel in western Labrador is 55 cents a litre, and

down in Baie Comeau it is 41 cents a litre -

AN HON. MEMBER: (Inaudible) Mount Wright.

MR. A. SNOW: Now the hon. member talks about it's in

Mount Wright, they don't buy it from Mount Wright. In the Cardlock system you

buy it in either western Labrador or you buy it down in Baie Comeau. Now that's

where they're buying it.

I'm not being cheaply political about it. I want to explain

it to the House so they can understand it. You can't buy it in Mount Wright, in

the Cardlock system. You buy it in either western Labrador or Baie Comeau. So

what happens is that the rig operators are buying it in Baie Comeau, loading up,

putting extra size tanks on these vehicles. They load up in Baie Comeau and they

pay forty-one cents a litre. In Newfoundland, Labrador portion of this Province,

they pay fifty-five cents a litre.

Mr. Chairman, that's a tremendous difference. So you can

imagine that this is -

MR. CHAIRMAN: The hon. the Minister of Mines and Energy

on a point of order?

AN HON. MEMBER: By leave.

MR. A. SNOW: Go ahead.

DR. GIBBONS: Just a bit of information. My understanding

is that the price of diesel in Montreal is fifty-three point six cents a litre

as of a week ago. I would be surprised if it's forty-one cents a litre in Baie

Comeau.

MR. CHAIRMAN: The hon. the Member for Menihek.

MR. A. SNOW: Mr. Chairman, it probably is.

AN HON. MEMBER: (Inaudible) Montreal.

MR. A. SNOW: This minister - yes, and he can wave around

his figures. This minister should be aware - he is the Minister responsible for

Mines and Energy - that there is a graduated tax on gasoline and diesel fuel in

the Province of Quebec. Now he should know that. He's the minister responsible

for these things in this Province. I've been arguing in this House since I've

been elected that we should have a similar type of system in this Province. A

similar tax regime. Now we see what the hon. minister plainly points out to all

of us - he doesn't understand what's occurring in his own Province. You see,

they do have a graduated tax regime in their province because they recognise the

border situations, Mr. Chairman.

AN HON. MEMBER: (Inaudible).

MR. A. SNOW: That's exactly how it works. Now you see the

hon. Member for Placentia, he understands the system. He's a world traveller, he

knows how it works. Besides that, he's a Montreal Canadiens fan so he's not all

bad.

MS. VERGE: He doesn't understand the MOGs but...

MR. A. SNOW: Mr. Chairman, now that I've straightened out

the hon. Minister responsible for Mines and Energy, and I hope that he will

verify what I'm saying, that it is a graduated tax system in border situations,

because of the Quebec government, which I've always said is the most creative

government in this country with regard to taxation.

AN HON. MEMBER: They have the highest taxes in Canada.

MR. A. SNOW: No!

AN HON. MEMBER: Yes!

MR. A. SNOW: No, Mr. Chairman.

AN HON. MEMBER: The highest taxes (Inaudible).

MR. A. SNOW: Mr. Chairman, this government has the

dubious distinction of being the highest in the country. Mr. Chairman, read my

lips.

They recognise border situations because of the tax - they do

have a high tax in Quebec, very high taxation in Quebec. But they're still

creative in their financing. One of the methods is the graduation tax on

gasoline and fuel for road taxes. That's creative. They were the first place in

this country to do it. They were the first place in this country to have

lotteries, believe it or not, was in Quebec.

AN HON. MEMBER: (Inaudible).

MR. A. SNOW: No, they weren't the first ones to have toll

bridges. No, Mr. Chairman, I don't think they were, anyway. I shouldn't -

SOME HON. MEMBERS: (Inaudible).

MR. A. SNOW: Anyway, Mr. Chairman, I'm not elected to

come to this House and defend the taxation regime in Quebec. I'm not only

elected to come and point out to ministers responsible that they're mistaken

when they come up with some information with regard to taxation policies in this

Province and other provinces. I am elected to come here and suggest to this

government that there are methods of being a little more creative. Use that

system that they have in Quebec. So that what you're doing is again creating the

level playing field. So that these trucks will come up from Quebec they will

load up their fuel in Labrador and pay their taxes here. They might even stay

the extra night and check into a hotel room, buy some meals, that is what will

happen or maybe even better than that, Mr. Chairman, you might see trucking

companies move to western Labrador and establish a new business because of the

fairer tax regime that we are going to put into place, in this Province, Mr.

Chairman.

That would be an ideal situation, that they would come to our

Province and establish, not load up with super big tanks on their trucks, pay

all their revenue in one province, drive through, tear up our roads and go back

out again. That is not what we want, we would like for them to move up and

establish in western Labrador, not just to purchase their fuel either, Mr.

Chairman, or buy a meal but if they do that, that is good too. But, Mr.

Chairman, we have to address this problem of lowering the tax in border areas. I

have attempted to do it in gasoline, when the previous Minister of Finance was

completely oblivious, completely oblivious to the reality of the real world,

which does not surprise anybody after a couple -that was two years ago, now

everybody agrees with me, that he is oblivious to the real world. He does not

understand what is happening out there Mr. Chairman, he just does not

understand. He left being the mad professor at the university and now, Mr.

Chairman, he is gone to the Cabinet room - he is a nice fellow, he just does not

know what is going on, Mr. Chairman, that is all. He just does not know what the

real world is about. He left being a professor and now he is in the Cabinet room

and he figures everybody out there makes $150,000 bucks a year, including

pensions and then they - everybody got a $3,000 chair, everybody gets carpet up

to your ankles, he figures all of that happens to everybody but it is not true,

Mr. Chairman, it is not true. Now, Mr. Chairman, it is only in the Cabinet room

that that occurs. Mr. Chairman, I want the Minister of Finance in all

seriousness to really sincerely look at instituting a graduated tax in this

Province at border situations. I think by doing that in this Province we can

create a better economy, not just in my area of the Province, Mr. Chairman, I

speak in defence of the Member for Eagle River, that they should have a very

similar type of thing down there. They should, Mr. Chairman, and I sincerely

believe that if we continue to do that, if we could do that, if you could do

that, Mr. Chairman, if this government would lower the tax as a specific example

of lowering this tax of fourteen cents, put in a graduated tax of lowering this

diesel fuel, you will attract more business to western Labrador, create -

MR. CHAIRMAN: The hon. members time is up.

MR. A. SNOW: By leave? May I clew up?

MS. VERGE: By leave. He is on a roll, don't be mean.

MR. CHAIRMAN: The hon. the Member for St. John's South.

SOME HON. MEMBERS: Hear, hear!

MR. MURPHY: Thank you, Mr. Chairman, one of my better

days in the House, I am getting so slim and losing so much weight that the Chair

did not see me. This is just a few comments about this particular Bill, on this

God help us all day, I agree and totally concur with the Member for Grand Bank

that there are some problems with gasoline in different grades. Now I know the

Member for Fogo and the Member for Torngat Mountains and what have you, will

remember when we used to dye, we used to dye fisherman's gas because it came at

a very, very much lower price. A lot of people did not only put it in their

boats of course, they put it in their pickup's and what have you. I would

suggest that maybe that is a way to control it because there are without

question, there are rip-offs taking place by the big multinational oil companies

AN HON. MEMBER: (Inaudible).

MR. MURPHY: Perhaps the hon. member wants to get up and

talk about that. But speaking of taxes, just to pick up on what the Member for

Menihek was talking about, he is partially correct and quite a bit of what he

had to say is totally wrong but I will tell you what is wrong. The Member for

Torngat is here he should be out getting a coffee like I told him last week. I

think when we are talking about taxes we have to pay attention today to

something that has probably escaped most members and most of the public. If you

look at the paper you will see that the Prime Minister of the nation has

referred to the new President of the United States - speaking of taxes, Mr.

Chairman - saying that Mr. Clinton has gotten smart. Mr. Clinton is now going to

structure the tax base in the United States on the Mulroney program.

It is incredible that - we knew what Reagan economics was, we

knew what Bush - Mr. Mulroney sided with those two people and spoke very highly

of the Republican Party, which is basically the same as our Conservative friends

opposite. Now, he is taking credit today that Mr. Clinton has seen the light and

he is structuring the United States tax base on the Conservatives in Ottawa.

That is what this whole bill is about, the tax structure in relationship to

Ottawa.

The Member for Menihek gets up and waves his arms about this

great Province that neighbours his community in Quebec. Quebec - we just saw

Bill 91 go through, Mr. Chairman - not a peep out of Quebec. Because all the

laboratories associated with the drug programs are where? They're in Quebec. So

Quebec has lobbied itself, lobbied Bill 91. We will find out when the hon.

member has to stand in his place some day, if he is still around, and talk about

the devastation on the seniors and the poor and the government in relationship

to Bill 91. Maybe he will get up with the enthusiasm he got up with today,

talking about two cents a litre. What he should realise is that the gasoline

last April and May was four cents more a litre than it is right now. That is

what he should realize.

AN HON. MEMBER: (Inaudible).

MR. MURPHY: Oh yes. It was down to 56.9 cents and it is

now up to 58.9 cents, I remind the hon. member. This time last year, it was 61.9

cents. It was 56.9 - it is now 58.9.

AN HON. MEMBER: (Inaudible) still inside the overpass.

MR. MURPHY: In St. John's - yes, but you can go to

Alberta and it has to be cheaper, because the source is next-door. I know, I

understand where he is talking about. There are some new incentives that the

Minister of Finance brought down last week with his financial statement. The

hon. Member for Menihek talks about new companies established, trucking

companies and what have you. There are good things in the paper that the

minister delivered last week. Maybe he can take some advantage of that.

Maybe he would spend some time looking at what the minister

had to say and tell the people of Labrador West how they can take advantage.

Maybe that is what he should do, not stand up and criticise everything and

anything on this day of all days when Mr. Mulroney said: It is marvellous to see

the United States taking a financial approach out of the page of the Mulroney

book, from Mr. Wilson, who wasn't happy to wait for the Americans to have a

recession, he started one on his own.

AN HON. MEMBER: (Inaudible).

MR. MURPHY: The hon. the Member for St. John's East - I

know we don't always see eye to eye. Most of the time we do.

MR. WARREN: You didn't give him leave, sure.

MR. MURPHY: I beg your pardon?

MR. WARREN: You didn't give him leave!

MR. MURPHY: We certainly will give the member leave. We

will give the member leave, the same leave as to any one of the members here.

There is no problem with giving the member leave. Once in every fifty-two

opportunities, he can stand.

MR. WARREN: Why would you give him one in fifty-two?

MR. MURPHY: Because that is the member's status in this

House, I tell the Member for Torngat Mountains.

MR. WARREN: (Inaudible).

MR. MURPHY: Certainly is.

MR. WARREN: It is not fair.

MR. MURPHY: Well then, you had better read the rules, I

suggest to the Member for Torngat Mountains.

AN HON. MEMBER: (Inaudible).

MR. MURPHY: Read them. He only has a couple more months

to read them anyway. Don't read them. There is no need for the Member for

Torngat Mountains to read anything. He is the critic at large, the walking

critic.

So I say, Mr. Chairman, I do support what the hon. the Member

for Grand Bank had to say, that we should, from a consumer point of view, pay

strict attention to what is happening at the pumps. I totally disagree with what

the Member for Menihek had to say. In actual sense, he is in here, he picks on

every minister, he raves at the Minister of Health, who did a marvellous job for

three years in Finance, an incredible job with what he had to work with. He will

go down in the history of this Province as the man who made 200 beans out of 100

beans. I mean, it is incredible what he has done.

AN HON. MEMBER: (Inaudible) row of beans.

MR. MURPHY: No, I am not going to sit down yet

(inaudible), sit down and relax. I say to the hon. member, time will record that

in a very - not in a time when it was, 'run off and sell the bonds', and 'give

her liver' - the days of prosperity and all that kind of stuff, it is the tough

times that the crane comes to the top. It is not the good days, the glory days

when everything is going well. The hon. member knows what it was like in

Labrador West when he opened his business first; they were lined up like they

are in George Street, trying to get in. Well, now he is only full, there is

nobody lining up, so that is a disappointment. I can understand his quandary,

but let me say in all honesty, again, that this is a necessity; the hon. member

knows it is a necessity, it does nothing to deter anything.

I went in to the mall the other night and couldn't find a

place to park, and somebody said to me, 'Well, there is nobody spending

anything, nobody spending a dime, they are all in -' well, how in heaven's name

did they get there? They bought the gasoline at the pumps to get there, so at

least they are spending. So the hon. member's doom, and the hon. Opposition's

doom has not impacted on the people of this Province, it has not impacted on

them one iota, although they get up and scream.

The people understand the need; they understand what the

Minister of Finance had to do. He didn't want to do it, he would have liked to

take two cents off, but people understand exactly what is going on and the hon.

member, I know, is frustrated over what happened last weekend, when CBC brought

out that information. If I were over there, I would be upset too. I would

probably throw stuff around, I would be so upset.

MR. WARREN: What information is that?

MR. MURPHY: I don't know, something to do with polls or

something. Perhaps it is hydro or Newfoundland Light and Power or something.

MR. WARREN: No, I don't think so.

MR. MURPHY: It is another kind of poll, the Member for

Eagle River tells me.

AN HON. MEMBER: (Inaudible).

MR. MURPHY: Eighty feet - no, 80 per cent. Oh, I see.

Well, no wonder hon. members opposite are upset.

AN HON. MEMBER: Eighty-one.

MR. MURPHY: Eighty-one, the Minister of Finance reminds

me. He was out this morning - now, here is the reality of what is going on in

the world. Two weeks ago, the Minister of Finance couldn't get invited anywhere,

the Opposition was saying, he was 'Wicked Winst', they called him, 'Wicked

Winst'. And what do we see two weeks later? - "Have breakfast with 'Winst'."

Fifteen dollars to get in for a few toutons and he blocked her.

MR. DUMARESQUE: Now, he is 'Wonderful Winst'.

MR. MURPHY: He blocked her, he filled her right to the

rafters, told them the truth and what happened? He got in - 'Wonderful Winst',

now. He went from 'Wicked Winst' to 'Wonderful Winst'. So, obviously, Mr.

Chairman, just these few words, that I do agree with the Member for Grand Bank,

totally disagree with the Member for Menihek and I will wait to see what the

Member for Kilbride has to say.

AN HON. MEMBER: And you might have to get up again.

MR. MATTHEWS: I might have to get up again if he is going

to get on with any of that fertilizer.

MR. CHAIRMAN: Order, please!

The hon. member's time has elapsed.

The hon. the Member for Kilbride.

MR. R. AYLWARD: You will be up again, Sir. You will be up

again.

Mr. Chairman, I just want to start this debate on Bill 60,

with a few quick words. First of all, I want to congratulate the Minister of

Finance. I didn't have a change to speak on the mini-Budget, there wasn't enough

time to give that a proper debate. But I do want to congratulate the Minister of

Finance for a good job. He did a good job. His boss came to him - King Clyde

came to the Minister of Finance and said: Mr. Minister, will you please get me

out of a jam. I have four or five months left, six at the outside. I have six

before I can squeeze in an election. Can you possibly get me out of a jam? So

the minister said: Well, Mr. Premier, I will do my utmost, I will do my best to

get you out of a jam if I can, because you are the boss and we all know the

Minister of Finance is a loyal minister and he works hard; he probably works

harder than anyone else in this House of Assembly, and I say that seriously,

too.

Well, Mr. Chairman, he said to the Premier: Yes, I will try

to get you out of a jam. So then the whisper campaign went out about the

rollbacks. He and the King, himself, called the unions in, and told the unions

that they were going to get a rollback, nothing else we can do about it until

every public servant in this Province was so upset with the group, the Premier

and the Minister of Finance, that there was almost blood in the streets - that

is what happened, but, all a part of the plan, with the Minister of Finance

still doing a good job. I think it was a good tactic: Call them in; tell them

the worst; tell them more than the worst. Because then when we settle for the

mean of that we could be all right.

So he got all the unions leaders in and told them, `There is

going to be a rollback,' and they went out as fast as they could and told

everyone else there was going to be a rollback and everyone got upset and up in

arms, until they started getting to the backbenchers. Some of the teachers got

to the Member for St. John's South, they got to the Member for Eagle River, and

they got to the Member for Waterford - Kenmount at a meeting that I attended.

They did go to the Minister of Finance. He attended a meeting of teachers at one

time, and a tough meeting. It was a hard position to be in, I must say.

AN HON. MEMBER: Port de Grave.

MR. R. AYLWARD: The Member for Port de Grave. They got to

all of them, and us - both sides of the House of Assembly, they got to us. It

was part of the plan of the Premier and the Minister of Finance.

So when they came out with a wage freeze, which is what it is

generally, because you are not going to get any more once you start bargaining,

but you are going to get less - I will even cover this up when I say it, that I

congratulate the Premier for being honest. Because today he was on television

saying, `We are going to start negotiations, but don't come looking for

anything.' He told them flat-out that they were going to get a rollback. People

today are so relieved that they didn't get a rollback, that I never thought I

would see it in this Province. I never thought I would see the President of the

Teachers' Union on television saying, `Thank you very much, Clyde Wells, for

freezing my wages.' That is what he said, `I am so happy!' I almost got sick

watching television that night. I couldn't believe it, never heard that before.

I could almost see the Minister of Employment and Labour when

he was out on the steps with the tissue in his hands. What would it have been

like for him to come out on television that day and say, `Thank you very much,

Mr. Premier, for zero and zero,' or teachers cutbacks or whatever we were doing

at the time? It was unbelievable, Mr. Chairman!

Anyway, I just wanted to congratulate the Minister of

Finance. He did a good job. He frightened everyone to death. He came in with a

tough budget with touch restrictions, including what we are doing here now, and

everyone went around thanking the Premier for doing such a good job, because he

didn't roll their wages back. So that was good, but it won't work for long. You

can only get away with that so often. We have experience at it. So you can only

get away with that so often.

Mr. Chairman, I was interested in what the member for St.

John's South got up to talk on. His constituents are going to get nailed to the

wall with this gasoline tax. So I expect him to get up in this House of Assembly

and support the people in his district and say how hard it is going to be on

them to get this gasoline tax increase, when it seemed a couple of weeks ago

that they might be getting a break. Once in the last four years someone was

going to get a break. The price of gasoline was going down. People were going to

finally get a small break of a couple of cents a litre. So I expect the member

for St. John's South, who is a good district person and who usually gets up here

championing the cause of his constituents - he hopped to his feet and what did

he talk about? Bill Clinton and Brian Mulroney. Mr. Chairman, whatever they have

to do with this increase in gasoline tax, from 15.6 to 17.6, I don't understand.

He went from Bill Clinton and Prime Minister Mulroney to talk about Quebec.

Well, Mr. Chairman, that has nothing to do with St. John's South. The people in

St. John's South do not want this tax increase. The member knows that. They

would like to get a break on their gasoline tax, the same as anyone else.

Mr. Chairman, the ministers here who make up these, they

don't care. It doesn't matter to them. They can increase gasoline tax as much as

they like because they all have a credit card. They will all use their credit

cards. Now, you can put twenty cents on it and it won't hurt them. These are the

people who are making the decisions to increase gasoline taxes.

I was hoping the Minister of Works, Services and

Transportation would be here today, Mr. Chairman. I guess he is not far away. He

answered some questions I asked on Thursday or Friday, I believe it was. I asked

him questions on reclassification of some people in the department. Mr.

Chairman, for some reason he didn't hear it on the Open Line Show Thursday. This

was no great secret, if he thought it was. So when I asked the questions

Thursday or Friday, whenever I did, I can't remember now, Friday morning I guess

it was - the first thing he does, and this is a common trait of ministers on

that side of the House, is call in all the staff in his payroll department and

rake them over the coals, Mr. Chairman. He called every one of his payroll staff

into the office and had his deputy minister rake all of them over the coals.

MR. MATTHEWS: Who?

MR. R. AYLWARD: The Minister of Works, Services and

Transportation, just because I asked an innocent